OceanaGold PH discounts IPO price
OCEANAGOLD (Philippines) Inc., the operator of the Didipio gold-copper mine in Northern Luzon, has set the final offer price for its initial public offering (IPO) at P13.33 per share, lower than the initial goal of P17.28.
The 23-percent discount from the maximum offer price, which an analyst said was likely prompted by “challenging” market conditions, has limited the expected gains to P6.08 billion from P7.6 billion.
Proceeds from the sale of up to 456 million secondary common shares, equivalent to a 20-percent stake in OceanaGold Philippines, will go to the selling shareholder, parent firm OceanaGold Corp.
The Australia- and Canada-based parent company last week said the proceeds would be “applied … toward the repayment of the company’s debt” that was at $135 million as of the end of last year.
The IPO, required under the terms of the firm’s mining permit and scheduled to run from April 29 to May 6, was approved by the PSE last week and by the Securities and Exchange Commission in March. The listing of the shares — to be traded on the PSE’s main board under the stock code “OGP — has been set for May 13.
Asked to comment on the pricing news, China Bank Capital Corp. Managing Director Juan Paolo Colet said the
lower IPO price was prompted by “challenging equity market conditions.”
“It is very likely that investors demanded a lower price to boost potential returns,” he added.
Still, Colet said “the final offer price translates to an estimated dividend yield of around 12.2 percent, which is very attractive.”
OceanaGold Philippines will be the first firm to list on the PSE this year.
It is expected to be followed by the Saavedra-led Citicore Renewable Energy Corp., which has also adjusted the indicative date of its offering from March to the second quarter of the year.
PSE President and Chief Executive Officer Ramon Monzon last week said that the bourse expects six companies to go public in 2024 as they remain hopeful of an IPO rebound following last year’s sluggish performance.
The PSE recorded just three IPOs last year, down from nine in 2022, amid challenges such as high inflation and interest rates as well as subdued economic growth.
More companies also left the bourse than joined: six companies were delisted — four voluntarily — in 2023.
Early expectations of interest rate cuts had spurred market optimism, but this has since faded as a result of growing inflation and escalating geopolitical tensions in the Middle East.
The benchmark Philippine Stock Exchange index, which threatened to drop below the 6,400 mark last week, closed 1.01 percent higher on Wednesday at 6,572.75.